The Dakota, Minnesota and Eastern Railroad (DM&E, AAR reporting mark DME) is a Class 2 railroad operating across South Dakota and southern Minnesota in the northern plains of the United States. Portions of the railroad also extend into Wyoming, Nebraska and Iowa. The DM&E and the Iowa, Chicago and Eastern Railroad (IC&E) are both jointly owned by Cedar American Rail Holdings, making the combined system the largest Class 2 network in the US.

In 1997 the DM&E announced plans to build into Wyoming's Powder River Basin to become the third railroad (after Burlington Northern Santa Fe Railway and Union Pacific Railroad) to tap into the region's rich coal deposits. The extension is planned to be completed in 2007 and has the potential of elevating the combined DM&E/IC&E system from AAR's Class 2 to Class 1.

1986–1996: startup and initial expansion

In the early 1980s, the Chicago and Northwestern Railway (CNW) announced plans to abandon a section of railroad through Minnesota and South Dakota that dates to 1859. Due to pressure from customers and Senator Larry Pressler from South Dakota, a deal was reached creating the Dakota, Minnesota and Eastern Railroad out of sections of the CNW from Winona, Minnesota, to Rapid City, South Dakota. This deal also included buildings, rolling stock and locomotives, mostly rebuilt EMD SD9s, from the CNW. The DM&E began operations on this track on September 5, 1986. The railroad was expanded in 1995 when it acquired additional former CNW branch lines from Rapid City, South Dakota, to Colony, Wyoming, and Crawford, Nebraska.

From startup to the railroad's 10 year anniversary in 1996, the DM&E has hauled nearly 500,000 carloads of freight, which includes 700 million bushels (approx 19 million tonnes) of grain. The DM&E celebrated the anniversary with picnics and employee appreciation events and excursions in Waseca, Minnesota, and Pierre, South Dakota.

1997–2004: proposed expansion into the Powder River Basin

In 1997, the DM&E announced plans to expand into the Powder River Basin (PRB) in Wyoming and start providing unit coal train service from that area. The railroad filed an application for the expansion to the Surface Transportation Board (STB) on February 20, 1998. Burlington Northern Railroad built into this area in 1979, and Chicago and Northwestern Railway (CNW) built into the area by 1984 (a project that was completed by CNW's successor Union Pacific Railroad). DM&E would become the third railroad to tap into the coal deposits in the region.

The DM&E's expansion would require the construction of 281 miles (452 km) of new track, upgrading 598 miles (962 km) of existing track (including all of the railroad's track in Minnesota), new interchange connections in Owatonna and Mankato, Minnesota, and three new rail yards. The STB approved the application on December 10 of that year pending completion of an Environmental Impact Statement (EIS), which was released by the STB on September 27, 2000. This plan would be the largest new railroad construction in the United States since the completion of Milwaukee Road's Pacific extension to Seattle, Washington, in 1909.

An analysis of the plan by Minnesota's Dakota, Minnesota and Eastern Railroad Working Group (http://www.dot.state.mn.us/ofrw/DM&EWorkingGroup.html) in 2001 showed support among customers and freight shippers, but DM&E's expansion plan led to complaints among residents in communities along the railroad's right-of-way. Many residents and businesses felt that roads in the area were not built with enough overpasses and underpasses to deal with the traffic flow problems that the longer and more frequent unit trains would produce at grade crossings. The objectors cited concerns of the general public in safely and quickly traversing their communities as well as the ability of emergency vehicles to cross the tracks to reach emergency scenes or hospitals.

After a period of public comment that lasted until March 16, 2001, and further review by the STB, the final EIS (http://www.stb.dot.gov/EIS/DME/DME_Final_EIS.htm) was issued on November 19, 2001. In this final approval, the STB agreed with the DM&E that no new bypasses around cities would be required even though the cities of Rochester, Minnesota, Brookings and Pierre, South Dakota, had requested them.

In April 2004, the DM&E was awarded the power of eminent domain in South Dakota by the 8th US Circuit Court of Appeals in Pierre, South Dakota. The ruling overturned part of South Dakota legislation passed in 1999 (two years after the railroad first announced its intentions to expand) that would have impaired railroad operations and construction in the state. This decision restores the legal process by which the railroad can effectively force landowners along the proposed new route to sell their land to the railroad.

With the final EIS in place and approval from the STB, as of 2004 DM&E is undertaking the expansion as proposed. Construction is expected to be completed in 2007. This expansion has the potential of upgrading DM&E's status from AAR's Class 2 to Class 1.

2002–present: consolidation with IC&E

DM&E and IC&E combined route map as of 2002.

On February 21, 2002 the DM&E announced that it would purchase the 1700-mile I&M Rail Link (IMRL) from its then current owners Washington Companies and Canadian Pacific Railway. The DM&E renamed the IMRL to Iowa, Chicago and Eastern Railroad (IC&E). Although a purchase price wasn't stated in the original announcement, an article in the May 2002 Trains Magazine suggests that several industry sources believed the total to be around $150 million.

The DM&E and the and the IC&E were combined under the holding company Cedar American Rail Holdings. Locomotives of both railroads were given a unified paint scheme (see below) and interchanges were streamlined between the two railroads. The administration of both railroads is handled by Cedar, further streamlining processes between the two railroads. As a result, the combined DM&E/IC&E system makes up the largest Class 2 railroad in the United States; it is also the eighth largest system of all American railroads and the only system with direct rail connections with all Class 1 railroads in North America.

Rolling stock

DME 4006, City of Balaton

The DM&E originally purchased used first-generation locomotives from a variety of railroads, in the early years it was more common to see a locomotive with a Milwaukee Road or Chicago and Northwestern paint scheme than a DM&E paint scheme. Over the years, the locomotives were repainted, and nearly all of them are now in the DM&E's paint scheme (which closely mirrors that of sister Iowa, Chicago and Eastern Railroad) of blue with a yellow stripe along its length.

The DM&E assigns names to all of its locomotives when they are repainted, usually after locations along its right-of-way, but a few exceptions have been named for people (like road number 550, named after Senator Larry Pressler). All of the first-generation diesel locomotives purchased from the Chicago and Northwestern and Milwaukee Road have since been replaced with more recent locomotives, although the newer locomotives were also bought used.

DME 49328

External links

• DM&E official website (http://dmerail.com)
• South Dakota Office of Railroads: DM&E facts (http://www.sddot.com/fpa/railroad/carr_dme.asp)
• Surface Transportation Board, DM&E Final Environmental Impact Statement (http://www.stb.dot.gov/EIS/DME/DME_Final_EIS.htm)
• DM&E photo gallery (http://www.btinternet.com/~usrailfans/Railroads/DM_E/dm_e.html)
• Unofficial DM&E Home Page (http://www.visi.com/~mfrahm/dme/)

References

• Cedar American Rail Holdings, Inc. (2004), Serving the Heartland of America (http://dmerail.com/PDF/CARHMarketingPamphlet.pdf) (PDF). Retrieved January 5, 2005.
• City of Mankato, DM&E Railroad Proposal (http://www.ci.mankato.mn.us/dme/index.php3). Retrieved January 5, 2005.
• Dakota, Minnesota and Eastern Railroad (September 13, 1996), DM&E Marks 10th Anniversary (http://www.visi.com/~mfrahm/dme/news/10th-anniversary.html). Retrieved January 5, 2005.
• Dakota, Minnesota and Eastern Railroad Working Group; Minnesota Department of Transportation and Minnesota Planning (April 2001), DM&E Expansion in Minnesota (http://www.dot.state.mn.us/ofrw/DM&E/dmeexpansion.pdf) (PDF). Retrieved January 5, 2005.
• Duff, Diane C., Alliance for Rail Competition (November 13, 1998), Letter of Support for DM&E (http://www.railcompetition.org/library/reg_filings/19981113/letterDM&E.htm). Retrieved January 5, 2005.
• Gilchinski, Steve (February 2002), Coming: A third Powder River Basin player, Trains Magazine, p. 10-11.
• Gilchinski, Steve (May 2002), DM&E begomes "a significant national player", Trains Magazine, p. 14.
• Hetland, Cara; Minnesota Public Radio (June 11, 2003), DM&E builds railroad empire while it awaits court approval (http://news.minnesota.publicradio.org/features/2003/06/11_hetlandc_dmeupdate/). Retrieved January 5, 2005.
• Kafka, Joe; Associated Press (April 15, 2004), Ruling moves railroad's plans forward (http://dmerail.com/News/Eminent%20domain%20article.pdf) (PDF), Argus Leader, Sioux Falls, South Dakota, p. 3B. Retrieved January 20, 2005.
• Mayo Clinic (July 15, 1998), DM&E Proposal (http://www.mayo.edu/comm/mcr/news_344.html). Retrieved January 5, 2005.
• Office of Freight, Railroads & Waterways; Minnesota Department of Transportation (2005), DM&E (http://www.dot.state.mn.us/ofrw/DM&E.html). Retrieved January 5, 2005.